Devon sells Oklahoma assets
Devon Energy is offloading non-core assets in northern Oklahoma in a $200 million sale to White Star Petroleum, a company formerly affiliated with the late Aubrey McClendon.
White Star said the package comprises about 210,000 "largely contiguous" net acres that "immediately offset" its position in north-central Oklahoma.
The acquired acreage is primarily located in Payne, Lincoln, Logan and Garfield counties in Oklahoma, with most of the position held by production.
It is prospective for the Mississippi Lime and Woodford shale plays, with proven reserves of 11 million barrels of oil equivalent, White Star said.
The assets produced an average of 12,800 barrels of oil equivalent per day in the first quarter, generating cash flow of $8 million, according to Devon.
White Star was formerly known as American Energy – Woodford, one of the companies under McClendon's American Energy Partners umbrella. The company, backed by private equity sponsor Energy & Minerals Group (EMG), changed its name late last month.
The name change is part of EMG's effort to rebrand the company as it transitions to a standalone oil and gas player.
For Devon, the sale furthers the company's drive to divest between $2 billion and $3 billion of assets this year as it streamlines its portfolio amid low oil prices.
Devon chief executive Dave Hager said proceeds from the sale, expected to close in the second quarter, would be used to "further strengthen our investment-grade balance sheet".
"This timely transaction accelerates Devon's efforts to focus exclusively on its best-in-class resource plays in onshore North America," he added.
The Oklahoma City-based company is looking to monetise further upstream assets and is also marketing its 50% interest in Canada’s Access Pipeline, with a possible sale to be announced in the first half of 2016.
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